Categories Technology

Sprint’s investment plans make it a stock to watch

The fourth-largest mobile network operator in the country, Sprint Corp (S), hit an all-time low of $4.81 on Wednesday, as markets remained concerned that 5G handsets will account for a marginal fraction of all phones in 2021. Sprint, which was trading between $4.81 and $9.22 for the past 52 weeks, was the worst performing stock among the top four telecom giants. While Sprint lost 41.96% of its value last year, AT&T (T) lost 14.27%, T-Mobile (TMUS) fell 6.06% and Verizon (VZ) slipped 2.32%.

Though Sprint has been trading in green from May to September last year, the stock lost its rally after the ending of merger talks with T-Mobile. SoftBank, a Japanese company with a majority stake in Sprint, remained concerned on combined business’s ownership structure, thereby calling off the negotiations.

In mid-October 2017, independent research firm MoffettNathanson LLC had predicted that if the deal does not go through, then T-Mobile’s stock will initially decline to $54 a share and Sprint could plunge below $3. Sprint’s fall didn’t matter much to SoftBank, which had already made a profit from the investment after the telecom major initiated many cost-cutting measures.

Sprint stock at watch list
Picture Courtesy: Sprint

Eighteen out of the 30 analysts covering the stock have approved a Hold rating, while five recommend an Underperform. Four analysts suggest a Sell rating.

When looking at the growth estimates, analysts are expecting a 14.30% growth in the current quarter and 676.70% jump in the current year. However, the long-term outlook is not encouraging with an expected dip of 102.90% next year. In another five years, shares are expected to see a modest 5% growth.

Most sell-side analyst firms are slowly shifting their recommendation from Hold to Underperform, though a majority of them are waiting for upbeat results or new price-discounts from the company. Sprint’s plan to invest heavily in capital expenditure too has made analyst firms to cling to the stock.

Looking on to Sprint’s results

In the most recent earnings, Sprint posted better-than-expected EPS driven by tax reform benefits. The company was able to add more postpaid phone customers for 10 successive quarters and boosted prepaid customers for four subsequent quarters, thanks to its continued focus on the cost structure. The company improved its cost structure after progressing on its multi-year plan. However, this did not stop Sprint from raising its full-year 2017 operating income guidance, helped by cost-cutting measures.

The company had more cash and cash equivalents at the end of the nine months period, thanks to the cash provided by operating and investing activities. However, Sprint was unable to invest excess cash in stocks and bonds, after looking at a 96.8% plunge in the short-term investments.

Though Sprint has been trading in green from May to September last year, the stock lost its rally after the ending of merger talks with T-Mobile.

During this period, Sprint was able to pay its creditors a tranche of the money owed, as can be seen from the 3.2% decline in accounts payable. The company had narrowed the losses derived from paying more dividends and earlier net losses, leading to an 85.3% dip in accumulated deficit. A lower accumulated deficit has a positive effect on the business, and the company is thereby distancing itself from a bankruptcy.

Sprint has the ability to pay back its liabilities with its assets with a current ratio of 0.92 and has been aggressively financing its growth with debt, which can be seen from its debt/equity ratio of 140.13.

Industry focus

The carriers are expected to face sales fluctuations, forcing companies to reassess their capital-spending decisions.

More product-sharing deals are on cards between cable TV, satellite, and telecom operators. The vicious price competition has intensified due to technological upgrades and breakthroughs. Also, new products and services are coming within a short time frame, thus cutting down on product life-cycle and upgrade-cycle. The telecom players are surviving by offering bundled services to keep their position in the space.

The market is undergoing a transformation with regards to 5G trials and its deployment as wireless companies are predicted to improve their networks and offer expanded services. Outlook seems positive for the wireless and broadband players, which will be driven by increased satellites coverage and cloud computing technology.

Sprint will be able to increase its average revenue per user if it succeeds in aggressively pricing its services, besides extending its list of subscribers. Apart from this, Sprint doubling down on investing in capital expenditure this year is also welcome news. Holding this stock till any further updates on its direction would not be a bad decision.

Most Popular

Infographic: How Alaska Air Group (ALK) performed in Q1 2024

Alaska Air Group (NYSE: ALK) reported its first quarter 2024 earnings results today. Total operating revenue increased 2% year-over-year to $2.23 billion. Net loss amounted to $132 million, or $1.05 per

KMI Earnings: Kinder Morgan Q1 2024 adjusted profit increases; revenue drops

Kinder Morgan, Inc. (NYSE: KMI) reported higher adjusted earnings for the first quarter of 2024 despite a decrease in revenues. The energy infrastructure company also issued guidance for the full

What to expect when Altria (MO) reports first quarter 2024 earnings results

Shares of Altria Group, Inc. (NYSE: MO) stayed green on Wednesday. The stock has dropped 8% over the past one month. The tobacco giant is scheduled to report its first

Comments

  1. Pingback: Lincoln Georgis
  2. Pingback: Chirurgie Tunisie
  3. Pingback: fue
  4. Pingback: fue contact
  5. Pingback: Dental Training
  6. Pingback: scientific visits
  7. Pingback: GPA Calculation
  8. Pingback: prostadine
  9. Pingback: Fiverr Earn
  10. Pingback: Fiverr Earn
  11. Pingback: Fiverr Earn
  12. Pingback: Fiverr Earn
  13. Pingback: Fiverr Earn
  14. Pingback: fiverrearn.com
  15. Pingback: fiverrearn.com
  16. Pingback: fiverrearn.com
  17. Pingback: fiverrearn.com
  18. Pingback: french bulldog
  19. Pingback: fiverrearn.com
  20. Pingback: fiverrearn.com
  21. Pingback: morkie poo
  22. Pingback: jute vs sisal rug
  23. Pingback: bitcoin
  24. Pingback: future university
  25. Pingback: bulldogs puppy
  26. Pingback: grey frenchie
  27. Pingback: fue
  28. Pingback: lean manufacturing
  29. Pingback: Warranty
  30. Pingback: FUE
  31. Pingback: FUE
  32. Pingback: Moving company
  33. Pingback: Classic Books 500
  34. Pingback: FiverrEarn
  35. Pingback: Media
  36. Pingback: partners
  37. Pingback: Social Justice
  38. Pingback: FiverrEarn
  39. Pingback: FiverrEarn
  40. Pingback: FiverrEarn
  41. Pingback: live sex cams
  42. Pingback: FiverrEarn
  43. Pingback: FiverrEarn
  44. Pingback: FiverrEarn
  45. Pingback: FiverrEarn
  46. Pingback: FiverrEarn
  47. Pingback: FiverrEarn
  48. Pingback: FiverrEarn
  49. Pingback: FiverrEarn
  50. Pingback: FiverrEarn
  51. Pingback: FiverrEarn
  52. Pingback: rings
  53. Pingback: pearl
  54. Pingback: Slot Gacor
  55. Pingback: tea burn legit
  56. Pingback: cheap sex cams
  57. Pingback: fullersears.com
  58. Pingback: french bulldog buy
  59. Pingback: frt trigger
  60. Pingback: Litigio fiscal
  61. Pingback: 늑대닷컴
  62. Pingback: One Peace AMV
  63. Pingback: nang sydney
  64. Pingback: superslot
  65. Pingback: allgame
  66. Pingback: 918kiss
  67. Pingback: หวย24
  68. Pingback: pg slot
  69. Pingback: itsMasum.Com
  70. Pingback: electronic visa
  71. Pingback: duromine
  72. Pingback: 6mm arc ammo
  73. Pingback: itsMasum.Com
  74. Pingback: itsMasum.Com
  75. Pingback: nangs sydney
  76. Pingback: itsmasum.com

Comments are closed.

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top